If either you, your spouse or common-law partner moved to be closer to work, school, or to operate a business last year, you might be able to claim eligible moving expenses on your next CRA tax return. Keep reading to learn more about eligibility requirements to claim moving expenses, and for details on what you can deduct.
Who is eligible to claim a moving expense tax deduction?
Your new home must be at least 40 kilometres closer to your new job or place of business than your old home. You can only deduct moving expenses from the income you earned at the new location. Full-time students who move to attend a post-secondary program at a college, university or other educational institution can also deduct eligible moving expenses from part of their scholarships, bursaries, prizes, grants and research fellowships. This is only true for the portion of these amounts that would normally be considered part of their income. To calculate your Moving Expenses Deduction, use Form T1-M. Insert your total deduction on line 219 of your general income tax form (T1).
What moving expenses are tax deductible?
Eligible moving expenses may include:
- Transportation and storage costs. This includes packing, movers, storage, and insurance for your household items
- Travel expenses. This includes meals, vehicle expenses, and accommodations for you and your family. Meals and vehicle expenses can be calculated using the detailed or simplified method
- Temporary living expenses (up to 15 days)
- Costs associated with cancelling your old lease
- Incidental costs, including:
- The cost of changing your address on legal documents
- The cost of replacing driver's licenses and permits
- Costs associated with utility hook-ups and disconnections.
- Costs associated with maintaining your previous home while trying to sell it, including*:
- Property taxes
- Insurance premiums
- Utilities such as heating and other expenses.
*If you had a tenant after you moved, these expenses are not eligible. You can only claim costs associated with maintaining your home while it was vacant.
Selling and buying costs are tax deductible
You can also claim certain expenses related to selling your old home. These include advertising, notary costs and legal fees, real estate commissions, and mortgage penalties if you wind up paying your mortgage off before it reaches maturity. Costs associated with buying your new home are also tax deductible if they are related to a move for employment purposes in line with the above.
What moving expenses are not tax deductible?
Certain expenses are not eligible for the moving expense tax deduction. These include:
- Amounts paid to renovate or repair your home to make it easier to sell
- Losses you incurred to sell your home
- Travel expenses incurred while looking for a new home
- Travel expenses incurred while looking for a job in a new city
- The value of items you were not able to take with you to your new home (i.e., plants, perishable food, paint, cleaning products, ammunition, etc.)
- Expenses paid to clean or fix your old home according to your landlord's expectations
- Expenses paid to replace personal items such as carpets, toolsheds, curtains, or firewood
- Costs associated with a mail-forwarding service (i.e., Canada Post)
- Amounts paid to purchase adaptors or transformers for certain household appliances
- Costs associated with selling your old home if you waited to sell until the market improved, or for investment purposes
- Mortgage default insurance.
To make sure you claim every expense you have a right to under CRA tax rules, it's a good idea to keep a spreadsheet of eligible expenses. You should also keep digital copies of your receipts. Good luck with your move!